Oil declined for a second day on Monday on speculations that OPEC will fail to stabilize prices amid a global oversupply and concern over Chinese demand.
This came as Venezuelan President Nicolas Maduro told state-owned broadcaster Telesur that prices below $50 a barrel do not sustain investment, proposing a summit to address the slump, Bloomberg reported.
Oil has fluctuated the past three weeks as concerns over slowing demand in China fueled volatility in global markets.
“Oil is following the Chinese equity market lower,” Bjarne Schieldrop, Oslo-based chief commodities analyst at SEB AB, said by phone. “There’s some positive data coming from US rig count for example, and that could be positive for oil prices this week.”
Brent for October settlement lost as much as 83 cents, or 1.7%, to $48.78 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $2.91 to WTI.
West Texas Intermediate for October delivery dropped as much as 90 cents to $45.15 a barrel on the New York Mercantile Exchange and was at $45.63. The contract slid 70 cents to $46.05 on Friday. The volume of all futures traded was about 13% below the 100-day average.
Oil has fallen almost 60% since June 2014 on a global supply glut. Prices have seesawed in recent weeks as concerns about a slowing Chinese economy caused turmoil in global stock markets. A surprise gain in US crude stocks of 4.7 million barrels in the week to Aug. 28, the biggest one-week rise since April, added to worries of an oil glut.
That was despite the number of US oil rigs falling by 13 to 662 last week, according to Baker Hughes data, the first decline in rig counts in seven weeks.
A firmer US dollar also hurt oil prices by making the commodity more expensive for holders of other currencies.
Phillip Futures oil analyst Daniel Ang sees no sign of an immediate rally in crude.
"Iranian oil flowing back into the market is dampening any bullish sentiment," Ang said. "Prices should be moving downwards this week, as prices would hardly find support. Prices could move toward $43.53 and $46.81 for WTI and Brent."
